Wall Street closed higher on Monday as investors returned to chip and artificial intelligence-linked stocks ahead of second-quarter earnings season.
The gains were led by Broadcom after the company extended a custom chip supply agreement with Apple, giving the semiconductor group a fresh catalyst after two sessions of losses.
What Moved
Monday, July 13
The S&P 500 rose 0.72% to 7,537.43.
The Nasdaq gained 1.12% to 26,121.16.
The Dow advanced 0.29% to 53,055.91.
Broadcom rose 3.7%.
The S&P 500 information technology sector climbed 1.3%.
The Philadelphia semiconductor index gained 2.2%.
Microsoft fell nearly 1% after announcing about 4,800 job cuts.
SpaceX dipped 1% ahead of joining the Nasdaq 100.
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Why It Moved
The main support came from semiconductors. Broadcom rose after it and Apple extended an agreement through 2031 to develop and supply custom chips. That helped revive demand for AI and chip-related shares after recent pressure across the group.
The move reinforced how concentrated the market’s leadership remains. Investors are still rewarding companies tied directly to artificial intelligence infrastructure, chips, and high-end computing. That helped lift the Nasdaq and S&P 500 even as internal breadth looked weaker.
Declining stocks outnumbered rising ones within the S&P 500, which showed that the index-level gain was not fully broad-based. The rally was still powerful, but it depended heavily on specific technology names.
Microsoft offered a caution point. The company said it would cut about 4,800 jobs, or roughly 2.1% of its workforce. Investors treated the move as a sign that even the largest technology companies are managing costs while spending heavily on AI infrastructure.
Economic data was steady enough to avoid disrupting the rally. The ISM non-manufacturing purchasing managers index came in at 54.0, matching expectations and signaling continued services-sector expansion.
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Why It Matters Now
Several short-term signals emerged:
Chip stocks remain central to daily index direction.
Broadcom’s Apple deal strengthened confidence in custom AI chip demand.
Technology leadership is still narrow enough to leave the rally fragile.
Microsoft’s job cuts keep AI spending discipline in focus.
SpaceX’s Nasdaq 100 inclusion adds another volatility point for tech-heavy indexes.
Earnings expectations are high heading into second-quarter reports.
Analysts expect S&P 500 companies to increase aggregate earnings by 24% from a year earlier, with technology-sector earnings projected to rise about 65%. That leaves little room for weak guidance from companies tied to AI infrastructure.
The Fed remains another constraint. After last week’s cooler jobs report, traders priced a 25% chance of a quarter-point rate hike at the July 29 meeting. Minutes from the latest Fed meeting are due Wednesday and could reset expectations again.
In the immediate window ahead, market direction will depend on whether earnings confirm the optimism built into technology stocks. Strong chip and software results could extend the rebound. Weak AI returns, cautious guidance, or a more hawkish Fed signal could quickly test the rally’s narrow foundation.
